The temptation to buy right away and snap up the remaining almost-affordable properties in Toronto and Vancouver might be strong—especially for young professionals and other members of the millennial market who are increasingly feeling the pinch of lower purchasing power stemming from static wages and inexorably growing costs.
“On top of that, lenders are offering very low interest rates right now, so it’s hard to resist the lure of getting in while the market is up and rates are low,” analyst Melissa Dunne wrote in her Yahoo! Canada Finance
Dunne pointed at offerings such as the Meridian Credit Union’s 1.69 per cent fixed mortgage rate (for one year) as understandably attractive for the younger set. However, a closer analysis of the fine print reveals that a home buyer going for this package would be locked into a fixed rate of 2.59 per cent over a period of five years after the first 12 months are up.
“So, homebuyers need to ask themselves: If my mortgage went up a few hundred dollars per month, can I pay that increased amount and for how long?” the analyst warned.
This is where the unique knowledge of a mortgage specialist would come in, Dunne said. Such a professional can give young buyers a more accurate and complete picture of their purchasing and payment prospects.
Meridian Credit Union agreed with the assessment.
“The ideal mortgage really depends on your risk appetite,” vice president of sales and service Wade Stayer said, adding that an informed choice on the prospective buyer’s part would benefit both the consumer and the loan originator in the long run.
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In a purchasing environment characterized by a recovering economy, intense consumer competition, and ever-increasing prices in the best-performing markets, mortgage specialists remain to be the best guides in the current fiscal climate, according to an industry analyst.